Pension to become a loan?

Watch out home owners – they’re coming to get you!

With nearly 70 percent of retirees on a full or part Age Pension, the Australian Chamber of Industry and Commerce (ACCI)’s idea to turn the pension into a loan against the family home is sure to attract attention.

In fact, as Chief Executive Kate Carnell declared on ABC Radio National yesterday, we could head into a ‘Greek-style’ debt crisis if so-called ‘runaway’ spending on the Age Pension, family tax benefits and childcare was not reined in. So the the scheme offered in the ACCI budget submission is for the Age Pension to be paid as a loan to retirees who own a home, and then the ‘debt’ would be paid back by selling the house.

“It seems irrational really for a family home not to be counted when you look at pensioners’ capacity to fund themselves,” Ms. Carnell argued.

Good grief, Ms Carnell. Just where would you start?

So we take the Age Pension – a reward for service to the country introduced in 1908 – and we decide it’s not a right any more. No it’s a loan. And it’s a loan to those who have paid off their house – no mention of those who never saved a deposit or paid back a mortgage slowly, painfully over 20, 30 or 40 years. So let’s beat up old home owners, that sounds like fun. Because the pensioners clearly have a capacity to fund themselves.


Perhaps we should take a reality check, instead, and refresh ourselves with the numbers – one-third of Australian pensioners are living in poverty, according to Oxfam. And the money spent on the Age Pension by the Australian Government, expressed as a percentage of GDP, is the third meanest rate in all 14 OECD nations.

So rather than ‘runaway’ debt spent on the Age Pension, we have a mean, parsimonious government which knows that a third of age pensioners are living in poverty, but sees this as an inconvenient truth, best hidden by inaccurate statements and fear mongering about the increasing cost of a pension that our country can no longer afford.

Amazingly, we can afford large corporates’ tax minimisation practices, diesel fuel rebates for mining companies, generous superannuation tax concessions for the wealthy (somewhat ironically due to overtake spending on all Age Pensions), but any kind of increase in the pension to drag the bottom third up into some kind of sustainable income? No, that’s not affordable.

As always, the devil is in the detail, so we look forward to reading the full detail of the ACCI’s budget ideas. As you can, too, by visiting  


What do you think? Is the ACCI suggestion a reasonable response to the need to curb our national spending? Or do you take exception to the Age Pension moving from an entitlement to a loan? Should the ACCI be looking at savings within the business sector, rather than families and older Australians?

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Written by Leon Della Bosca

Publisher of YourLifeChoices – Australia's most-trusted and longest-running retirement website. A trusted voice on Australia's retirement landscape, including retirement income and planning, government entitlements, lifestyle and news and information relevant to Australians over 50. Leon has worked in publishing for more than 25 years and is also a travel writer and editor, graphic designer and photographer.

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